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Milk futures lower, cash dairy mixed

Class III milk futures at the Chicago Mercantile Exchange were pressured by follow through selling and the year to year increase in June milk production. August was down $.20 at $16.10, September was $.17 lower at $16.46, October was down $.10 at $16.71, and November was 4.07 lower at $16.83.

Cash cheese blocks were up $.0025 at $1.7075. One load was sold at $1.7075. The last uncovered offer was for one load at $1.72. Barrels were steady at $1.41. Five loads were sold, including three at $1.41. The last unfilled bid was on one load at $1.39. The last uncovered offer was for one load at $1.4125.

Butter was down $.025 at $2.585. Nine loads were sold, including one at $2.585 and three at $2.59. The last unfilled bid was on one load at $2.585. The last uncovered offer was for one load at $2.59.

Nonfat dry milk was $.0125 higher at $.8725. Six loads were sold, two at $.8725 and four at $.87. The last unfilled bid was on seven loads at $.87. The last uncovered offer was for one load at $.8725.

The USDA says milk production in the U.S. this past week was mostly steady to lower because of the weather. Milk is readily available in the Midwest, but surplus loads and committed loads are down. Class I demand is mixed, with cream levels in the Midwest called adequate to abundant, with most of the supply headed into ice cream. Midwest cheese processors are at or close to full capacity and stocks are building with food service demand steady to slower. Domestic butter demand is solid and export sales are rising because of competitive prices. Butter manufacturing is all over the board, from halted to heavy. The USDA describes supplies as manageable to building ahead of expected fall demand. At the retail level, conventional dairy ads were down 5% and organic ads were 1% lower. The spread between organic and conventional half gallons of milk was $.87, in favor of organic, the tightest spread so far this year.

According to the USDA, the June 2017 U.S. dairy cow slaughter was 236,700 head, 8.4% of the monthly total, compared to 223,700 in June 2016, which also accounted for 8.4% of the monthly kill. For the year to date, the dairy cow slaughter is 1.495 million head, 9.6% of the 2017 running count, compared to 1.449 million this time last year, which made up 8.4% of the January to June 2016 cattle slaughter.

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